Wall Street sees more upside for McDonald’s after strong earnings beat
Most analysts across Wall Street see further upside for McDonald’s after the burger chain posted a fourth-quarter earnings and revenue beat . In its last quarter, McDonald’s earned an adjusted $3.12 per share, surpassing the $3.05 per share analysts polled by LSEG had expected. It’s $7 billion revenue also topped forecasts of $6.84 billion. U.S. same-stores sales for the chain increased by 6.8%. McDonald’s attributed its success to promotions such as the Grinch Meal and Monopoly, which helped increase traffic and sales. The company has also tried to tap into more cost-sensitive consumers by reintroducing its Extra Value Meals. Shares of McDonald’s added less than 1% on Thursday morning. The stock is now trading nearly 6% higher on the year. Across Wall Street, analysts applauded the report. Most continue to adopt a bullish stance on the chain and see upside. “What else could you want?” Bernstein analyst Danilo Gargiulo asked, regarding the report, while JPMorgan analyst John Ivankoe wrote that McDonald’s was “making efforts to recapture attention lost to specialists.” “The value push is working, and we expect franchisees making more money leads to strong system alignment around new initiatives in ’26/beyond (including beverage, chicken, and ultimately remodels),” Citi’s Jon Tower added. Here’s how Wall Street’s biggest shops reacted. JPMorgan: overweight rating, $305 price target The bank’s price target implies about 6% downside from McDonald’s Wednesday close of $323.21. “McDonald’s 4Q results generally justified recent positive sentiment in the stock through 1) US comps of 6.8% vs our 5.0% and -1.4% last year, and IOM comps of 5.2% vs our 3.5% and 0.1% last year, 2) a more aggressive product calendar including a refreshed/modernized beverage product line-up launch including energy, 3) a potential update to recently launched chicken products to include various sauces (glazes) and seasonings, 4) extension of the Best Burger platform to include a differentiated Big Arch, 5) upcoming remodel cycle to lead to a more modern & efficient MCD supported by still strong system economics, and 6) G & A guided in-line with our expectations including possible benefit post finishing a global resources program by end of F27.” Morgan Stanley: equal-weight, $335 Morgan Stanley’s forecast corresponds to upside of 4%. “A good top-line quarter across segments, helped by some marketing hits, and better EPS as a result; value push tracking as expected. Given investments, EPS/FCF expectations not going up here, but MCD aims for an active year, and top line-driving strategies crystallizing for the coming years.” Bernstein: market-perform, $340 The investment firm’s target, raised from $320, calls for 5% upside. “With the stock crowded into the print, McDonald’s had only one option: beat and provide confidence that the main challenges are over. And they did just that, with a monstrous +6.8% SSSG in the US (vs 5.1% cons.), +5.2% in IOM (vs 3.3% cons.) and +4.5% in IDL (vs 2.4% cons.). With traffic improving affordability metrics and opportunities to lean into menu innovation and exclusive brand moments, it is hard not to be excited, and we increase our outlook for FY26, confident that McDonald’s can continue to take share from more challenged brands.” Deutsche Bank: buy, $364 Deutsche Bank’s forecast, up from $360, is 13% above Wednesday closing price. “MCD delivered a strong 4Q print with beats across the board. Global SSS of 5.7% reflected broad-based strength, and global momentum is expected to continue into 2026 supported by execution against “three for three,” including compelling value, marketing and menu innovation (with a particular focus on beverages & chicken) … We continue to like the setup from here with tangible catalysts to drive SSS outperformance globally and a return to HSD+ EPS growth, and combined with its defensive business model against the current backdrop, we believe MCD offers a favorable risk/reward profile.” UBS: buy, $365 UBS’ forecast, raised from $350, was approximately 13% higher than McDonald’s current price. “Despite gains YTD, we continue to like the setup for MCD shares in ’26 given catalysts to drive mkt share gains & strengthen US sales growth and defensive characteristics that provide earnings stability in a still volatile environment.” Goldman Sachs: buy, $372 Goldman Sachs target, up from $360, equates to 15% upside. “We are encouraged by the results of MCD’s successful execution across its three strategic pillars: compelling value (McValue, Extra Value Meals), record-setting marketing campaigns (Monopoly; Grinch Meal, which achieved the highest single sales day in company history), and menu innovation (Snack Wraps). We see further growth opportunity as the brand plans to roll out a new beverage lineup in the US later this year following encouraging results from the 500+ restaurant beverage test, with the company sizing the global beverage category at over $100bn+.” Citi: buy, $375 Citi’s forecast, up from $371, implies about 16% upside. “Aside from the 4Q MSD% global/US comp growth, there were other signals that indicate MCD’s share gains are likely to accelerate from here. Share gains with the most price sensitive consumer accelerated along with value/affordability scores, and, despite pressure on McOpCo margins, franchisee cash flows grew Yr/Yr. The value push is working, and we expect franchisees making more money leads to strong system alignment around new initiatives in ’26/beyond (including beverage, chicken, and ultimately remodels).” Barclays: overweight, $380 Barclay’s forecast, up from $372, corresponds to upside of around 18%. “4Q25 comp was above Street in each segment, supporting EPS upside. US comps accelerated through 4Q25 & such continued into 1Q26. Looking ahead, with comp momentum strong (led by value) & unit growth accelerating, top-line impressive. With uncertain WW macro, MCD should screen as a defensive staple.”
About the Author
Related
Discover more from InfoVera Online
Subscribe to get the latest posts sent to your email.
